It may only be Wednesday, but it has been a hectic week for Volkswagen and its TDI customers. Here’s what we know so far, and what we expect to come next.
The U.S. Environmental Protection Agency (EPA) announced Friday that it was ordering Volkswagen of America to address engine control programming installed in roughly 480,000 vehicles due to its ability to disable certain emissions control functions during normal use. This announcement covered four-cylinder, 2.0L TDI models sold in the United States from model years 2009 through 2015, to include the VW Golf, Jetta, Beetle and Passat and the Audi A3.
This programming can allegedly determine whether the vehicle is being operated normally (in the “real world”) or being put through an emissions testing protocol and alter the engine’s operating parameters accordingly, running more cleanly when an emissions test is detected.
“Specifically, VW manufactured and installed software in the electronic control module (ECM) of these vehicles that sensed when the vehicle was being tested for compliance with EPA emission standards. For ease of reference, the EPA is calling this the ‘switch,’” said EPA officials in a letter sent to Volkswagen.
The defeat programming alone is grounds for federal action, but compounding that is the fact that the vehicles in question are emitting as much as 35-40 times the amount of nitrogen oxide compounds allowed by law when operated on the road. The Passat, equipped with a urea injection system (Volkswagen calls it AdBlue), emitted (between 5 and 20 times the legal limit, depending on conditions) than the observed maximum from the Jetta.
Volkswagen’s non-compliance was discovered by the Center for Alternative Fuels, Engines & Emissions at West Virginia University. The Center was engaged in a project with the International Council on Clean Transportation (ICCT), an organization which was attempting to demonstrate the cleanliness of diesel passenger cars. ICCT had found discrepancies between real-world emissions and those disclosed in testing conducted elsewhere around the world and teamed up with the Center to see if the same results could be replicated in the United States.
The Center reported these discrepancies to the EPA, who confronted Volkswagen. Volkswagen said the discrepancies could be explained away by environmental and technical variables, but agreed to a small-scale recall campaign (a software update) to attempt to clean up some of the real-world emissions. Some owners of TDI models produced before the 2015 model year have already completed this program. Some of them have noted decreased fuel economy after the reflash.
CARB and the EPA continued to investigate the discrepancies, however, and found that even vehicles that had been reprogrammed were still emitting NOx compounds well in excess of federal guidelines. When confronted with this information, Volkswagen admitted that its software was gaming the laboratory tests.
ICCT and the Center also discovered discrepancies that could implicate other manufacturers in similar tactics, but since those companies do not sell many of their volume-oriented diesel models in the United States, the EPA did not have any follow-up research to share in that regard.
Volkswagen did not immediately fess up publicly, but when it did, the situation snowballed drastically. It was no longer a matter of some 480,000 cars that were sold in the U.S. Instead, Volkswagen said, the programming is present in some 11 million vehicles worldwide equipped with its four-cylinder TDI. The company announced that it would set aside 6.5 billion euros (~$7.25 billion USD) from its third-quarter earnings to implement a fix.
By Monday, Volkswagen’s stock price was in free-fall, dropping by as much as 23 percent and erasing more than $17 billion of the company’s paper value. Several executives who were expected to attend the company’s unveiling of the U.S.-market 2016 Passat in New York canceled their trips. Later in the day, the U.S. Justice Department announced that it would conduct a criminal investigation into the company’s actions and a stop-sale was ordered on all new and used four-cylinder TDI models.
During the reveal that evening, VW of America CEO Michael Horn told assembled media, influencers and dealer representatives that Volkswagen had “screwed up,” and would do everything in its power to regain the trust of the public.
On Tuesday, the EPA announced that it would expand its probe to include the 3.0-liter V6 TDI engine that is offered on the Audi Q5, A6, A7 and A8, on the Volkswagen Touareg as well as on the Porsche Cayenne. Audi was already included in the first probe, which affects cars like the A3 that are equipped with the 2.0-liter TDI mill, but Porsche’s inclusion was new.
The EPA is also examining all diesel-powered 2016 Volkswagen models, including the Golf, the Golf Sportwagen, the Beetle, and the recently-updated Passat. These vehicles have not been directly tested for compliance, but officials have banned the Wolfsburg-based car maker from selling diesel-burning 2016 cars until executives can prove that they are fully compliant with U.S. emissions laws. These 2016 models will be held at ports until the situation is resolved.
Wednesday, what many saw as the inevitable took place when VW Group CEO Prof. Dr. Martin Winterkorn announced that would officially resign. After his announcement, remaining Volkswagen executives announced that further resignations would likely be forthcoming as the company’s internal investigation proceeds.
Certain aspects of the fall-out from this scandal, such as additional terminations and resignations, are inevitable. Volkswagen’s U.S. sales will drop, as TDI models make up roughly 25% of the brand’s volume here. Audi is not as reliant on the 2.0L engine, but its many-years-long streak of monthly sales increases may be in jeopardy come October.
The DOJ says executives could face jail time if they were complicit in violating federal law. As a company, Volkswagen faces fines of up to $37,500 per vehicle sold, which could amount to as much as $18 billion. While it is unlikely that the government will seek the maximum fine (especially given the comparably lower penalties imposed on General Motors over its ignition switch debacle), it’s reasonable to believe the penalties will be severe.
As for customers, the immediate outlook is very hazy. The EPA has ordered Volkswagen to make the cars in question compliant; how that will be accomplished is entirely unknown at this point. In fact, it has not even been established that Volkswagen is capable of addressing the issue in the existing cars as they sit, and if it’s not possible to do so, the company could then be obligated to buy the vehicles back.
The most likely solution will be in the form of further ECU reprogramming. In order for these cars to have passed emissions in the first place, the “cheat” program had to be compliant. It then logically follows that Volkswagen could program the affected ECUs to operate within the parameters of the emissions-friendly code at all times, rather than disabling certain controls while the car is being driven normally, at the likely expense of real-world power and fuel economy.
The reprogrammed vehicles would very likely operate as originally advertised by Volkswagen, returning mileage reflective of what their window stickers suggested. Since the same programming that would force the engine to operate cleanly during emissions testing would trigger when the vehicle was being evaluated for fuel economy (and SAE net horsepower rating, for that matter), Volkswagen should not face accusations of false advertising should this occur.
The question then becomes one of customer satisfaction. Why? Because TDI owners have gotten used to mileage far in excess of what those window stickers promised. And since federal emissions laws apply whether local jurisdictions require smog testing or not, the government could compel owners to have their vehicles updated in order to keep them legally registered, and Volkswagen would likely be on the hook for facilitating that in cases where owners live far afield of the closest dealership. Given the size of VW’s U.S. network, that could be a big deal.
We promise to keep you updated on this issue and provide round-ups whenever we feel it is necessary. We know this is an issue of significant interest to our readers, and we want to provide you with the best, most current information possible. As always, thank you for reading.